Young female savers are set to have £100k less in retirement income than their male counterparts, according to data from Scottish Widows.
The firm said that lower average earnings, part-time work and taking time out of paid employment to care for family is setting women back by almost four decades.
Scottish Widows has found that there is still some way to go before the gender pensions gap closes.To reach retirement parity, a woman in her 20s today will have to work 37 years longer than a man the same age to accumulate the same income.
The firm revealed female employees will typically save £2,200 annually during the first 15 years of their career, compared to £3,300 for a man the same age
It comes as the firm found that more than a third (36%) under the age of 25 work in hardest hit sectors such as hospitality and retail, and almost half (49%) have been
It added any reduction in hours or a career break will have an impact on pension outcomes. For those working part-time or on reduced hours, this can mean lower contributions or missing out on auto-enrolment.
In addition, Scottish Widows said a lack of engagement amongst young female savers is also contributing to lower savings levels. More than one in five (21%) women under 25 admit that they have not started thinking about retirement. Just 46% of women in their 20s are saving the recommended minimum of 12% of their income, compared to 56% of men.
Jackie Leiper, MD Pensions, Stockbroking and Distribution at Scottish Widows, said: “Women were already facing systemic challenges when saving for retirement. We know that young women have been some of the hardest hit by the short-term financial impact of the pandemic and this has only exacerbated the challenge of reaching pensions parity.
“At the same time, caring responsibilities and high childcare costs are keeping women out of the workforce, lowering their contributions and denting their pension pots.”